(OTCQX: AYTU), a specialty pharmaceutical company focused on global commercialization of novel products in the field of
urology, provided today an overview of its business and growth strategy, as well as its financial results for the quarter ended
September 30, 2016. The Company will host a live conference call and webcast today at 4:30 p.m. ET.

Presented MiOXSYS™ clinical data at the American Society for Reproductive Medicine and the Japanese Society for Reproductive
Medicine annual conferences

Financial Highlights:

Increased net product sales 50% compared to the same quarter in the prior year; $698,000 for the quarter ended September 30,
2016 compared to $466,000 in 2015

Increased net product sales 42% compared to the June 30, 2016 quarter; $698,000 for the quarter ended September 30, 2016 compared
to $490,000 for the quarter ended June 30, 2016

$2.8 million in cash, cash equivalents, and restricted cash as of September 30, 2016, exclusive of recent capital raise

Raised $8.6 million in a public offering Aytu common stock and warrants in November 2016

“It continues to be an exciting time
at Aytu, as we are now in full swing with the Natesto launch, and this potentially game-changing product is already performing
ahead of our expectations” stated Josh Disbrow, Chairman and Chief Executive Officer of Aytu BioScience, Inc. “Additionally,
we’ve continued to see very nice uptake for Primsol

and ProstaScint, contributing to an impressive 42% increase
in net product sales compared to our previous quarter. Our commercial team is continuing to focus exclusively on growing revenue
for these products, with the expectation that Natesto will become the primary value driver for Aytu due to its differentiated product
profile and the unique timing of our entry into the $2.4 billion testosterone replacement therapy market.”

After growing revenue nearly 10-fold during
its 2016 fiscal year, product sales continued to increase quarter to quarter, bolstered in part by early sales of Natesto. Product
revenue for the fiscal first quarter 2017 was $698,000, up 42% from $490,000 during the fiscal fourth quarter 2016. Sales for the
fiscal first quarter 2017 consisted primarily of ProstaScint and Natesto customer orders along with Primsol and initial ex-U.S.
MiOXSYS sales. Natesto orders are reflective primarily of early reorders from wholesale customers who had already stocked Natesto
units prior to Aytu’s commencement of promotion in July 2016. Aytu expects to begin recognizing increased sales revenue for
Natesto that more accurately reflects prescriber demand during the third or fourth fiscal quarter 2017 as wholesaler inventory
levels from previous purchases have been depleted. Aytu anticipates sales revenue to continue increasing as Natesto prescriptions
continue to increase.

Natesto’s early prescription trends
are on a positive trajectory, with Aytu’s sales force consistently setting new weekly highs for new Natesto prescriptions.
Total Natesto prescriptions are also at a new all-time high after only 12 weeks, rapidly surpassing the previous benchmark set
for the brand in the U.S., which was achieved 29 weeks following its launch and with a significantly larger sales force.

In addition to Natesto,
Aytu increased ProstaScint revenue by 25% since July 2016 and increased the number of unique customers for
ProstaScint by 41% since its acquisition, and sales of Primsol were boosted by promotional efforts by Aytu’s partner
Allegis Pharmaceuticals. Finally, Aytu’s novel diagnostic tool for the assessment of infertility in men, the CE Marked
MiOXSYS system, has begun generating initial sales outside the U.S. from customers’ clinical use. The company is
preparing to begin formal clinical studies under the FDA’s

de novo

510(k) pathway for MiOXSYS and is partnering
with major infertility institutions including the Cleveland Clinic, Tulane University, and other prominent centers in the
U.S. The company’s international collaborators recently presented eight posters featuring MiOXSYS clinical data at two
major medical conferences: The American Society for Reproductive Medicine’s and The Japanese Society for Reproductive
Medicine’s annual conferences.

As of September 30

, Aytu had
$2.8 million in cash, cash equivalents and restricted cash, which did not include $8.6 million in gross proceeds ($7.7 million
net proceeds) from the Company’s November 2016 registered offering of common stock and warrants. Proceeds from the offering
will fully fund the final upfront payment due to Acerus Pharmaceuticals for the Natesto license and will support the continuing
Natesto launch and commercialization of ProstaScint and Primsol. Proceeds will also fund the planned MiOXSYS FDA clinical study
and provide operating capital for general corporate purposes.

Josh Disbrow concluded with, “Aytu
had an exceptional first quarter as our focus remains on growing revenue, primarily through execution of the Natesto launch plan
which is successfully underway. We also plan to advance MiOXSYS toward FDA clearance and U.S. commercialization, while continuing
to grow ProstaScint, Primsol, and MiOXSYS both inside and outside the U.S.”

Conference Call Information:

Interested participants and investors may access the conference
call by dialing either:

1 (855) 656-0926 (U.S.)

1 (412) 542-4198 (international)

The webcast will be accessible
live and archived on

Aytu’s website, aytubio.com, for 90 days.

A replay of the call will be available for seven days. Access
the replay by calling 1 (877) 344-7529 (U.S.) or 1 (412) 317-0088 (international) and using the replay access code 10096080.

About Aytu BioScience, Inc.

Aytu BioScience is a commercial-stage specialty pharmaceutical
company focused on global commercialization of novel products in the field of urology. The company currently markets three products:
Natesto

, the first and only FDA-approved nasal formulation of testosterone for men with hypogonadism (low testosterone,
or “Low T”), ProstaScint

(trimethoprim hydrochloride),
the only FDA-approved trimethoprim-only oral solution for urinary tract infections. Additionally, Aytu is developing MiOXSYS™,
a novel, rapid semen analysis system with the potential to become a standard of care for the diagnosis and management of male infertility
caused by oxidative stress. MiOXSYS is commercialized outside the U.S. where it is a CE Marked, Health Canada cleared product,
and Aytu is conducting U.S.-based clinical trials in pursuit of 510k de novo medical device clearance by the FDA. Aytu’s
strategy is to continue building its portfolio of revenue-generating urology products, leveraging its focused commercial team and
expertise to build leading brands within well-established markets. For more information visit aytubio.com.

For Investors & Media:

Tiberend Strategic Advisors, Inc.

Joshua Drumm, Ph.D.: jdrumm@tiberend.com; (212) 375-2664

Janine McCargo: jmccargo@tiberend.com; (646) 604-5150

Forward Looking Statement

This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, or
the Exchange Act. All statements other than statements of historical facts contained in this presentation, including statements
regarding our anticipated future clinical and regulatory events, future financial position, business strategy and plans and objectives
of management for future operations, are forward-looking statements. Forward looking statements are generally written in the future
tense and/or are preceded by words such as “may,” “will,” “should,” “forecast,”
“could,” “expect,” “suggest,” “believe,” “estimate,” “continue,”
“anticipate,” “intend,” “plan,” or similar words, or the negatives of such terms or other variations
on such terms or comparable terminology. These statements are just predictions and are subject to risks and uncertainties that
could cause the actual events or results to differ materially. These risks and uncertainties include, among others: risks relating
to gaining market acceptance of our products, obtaining reimbursement by third-party payors, the potential future commercialization
of our product candidates, the anticipated start dates, durations and completion dates, as well as the potential future results,
of our ongoing and future clinical trials, the anticipated designs of our future clinical trials, anticipated future regulatory
submissions and events, our anticipated future cash position and future events under our current and potential future collaborations.
We also refer you to the risks described in “Risk Factors” in Part I, Item 1A of Aytu BioScience, Inc.’s Annual
Report on Form 10-K and in the other reports and documents we file with the Securities and Exchange Commission from time to time.

AYTU BIOSCIENCE, INC.

Balance Sheet

(unaudited)

Assets

Current assets

Cash and cash equivalents

2,749,213

8,054,190

Restricted cash

75,031

Accounts receivable, net

509,440

162,427

Inventory, net

585,357

524,707

Prepaid expenses and other

553,083

215,558

Prepaid research and development - related party (Note 10)

121,983

Investment in Acerus

1,769,462

1,041,362

Total current assets

6,363,569

10,120,227

Fixed assets, net

313,185

231,430

Developed technology, net

1,118,319

1,159,736

Customer contracts, net

1,301,625

1,353,375

Trade names, net

186,639

194,472

Natesto asset, net

10,220,116

10,549,797

Goodwill

221,000

Patents, net

290,278

296,611

Long-term portion of prepaid research and development - related party (Note 10)